ECJ Dismisses British Airways’ Appeal

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Alex Nourry, Mar 21, 2007

On 15 March 2007, the European Court of Justice  dismissed an appeal by British Airways plc  against a judgment of the Court of First Instance, which dismissed an appeal by BA against a European Commission decision of 14 July 1999 finding that BA had infringed Article 82 EC Treaty by the application of commission schemes for travel agents which the Commission considered to amount to loyalty rebates and imposing a fine of EUR 6.8 million. The ECJ’s decision followed an opinion handed down by Advocate General Kokolt on 23 February 2006 that BA’s appeal should be dismissed, finally bringing to a close the long running saga which had begun in 1993 when Virgin lodged a complaint with the Commission in respect of agreements entered into by BA with UK travel agents.

Under the agreements, the travel agents received a basic commission for all BA tickets sold as well as other financial incentives, including: (i) for those agents with at least 500,000 in annual sales of BA tickets, a performance reward calculated on a sliding scale, based on the extent to which the agent increased its sales of BA tickets on a yearly basis compared to previous years; and (ii) additional commissions for three travel agents by reference to the growth of BA’s share in their worldwide sales.

BA subsequently introduced a new performance reward scheme which provided for an additional variable commiss